This invention generally relates to methods for calculating costs attributed to the use of computing equipment and services. In particular, this invention relates to the costs of providing and maintaining computing services and methods to analyze those costs.
The Total Cost of Ownership (TCO) is defined as the total, per-seat cost incurred across a technology organization through the provision of continuing computing services to its users. It has now become an important metric for Information Technology (IT) to its users and for the IT industry. Organizations can evaluate their TCO either by considering their overall budgets through a top-down or bottom up approach.
As many organizations are under pressure to reduce costs, including of course the TCO for Corporate Systems, vendors and industry observers have predicted various levels of cost savings associated with both technology (e.g., migration from client-server environments to net-centric environments) and process improvements. Unfortunately most of the time their cost-savings claims do not provide the necessary context for decision makers to evaluate them, because the source of savings are not fully specified and the costs associated with the migration from one environment to another are not considered. Therefore, there is a need for an improved method for determining the TCO that provides a detailed analysis for decision makers.